6 QUESTIONS TO ASK AN INSURANCE AGENT IN YOUR 20’S AND 30’S
1. We’re getting married. Should we wed our auto insurance as well?
If one of you has a Mad Max-like driving history, then auto insurance might be one of those things you don’t merge once married. But if you and your spouse both have good driving records and no recent gaps in insurance coverage, you might save money by combining policies.
For a few more dollars a month, you can add ERIE Auto Plus, which includes features such as additional days of transportation expense coverage1 and waived deductible in certain situations that make ERIE’s great auto coverage even better.
2. We’re hunting for our first house – should homeowners insurance weigh into what we buy?
In the excitement of finding that first home, some buyers forget to consider the cost of homeowners insurance, and how different locations and types of homes might impact it. According to Realtor.com, the average annual cost for homeowners insurance is $952. However, factors such as distance from a fire department, proximity to storm-prone coastal areas, age of the home and your claims history can play a role in what it ultimately costs to insure a particular house.
A conversation with your ERIE agent as you start your search can give you a better perspective on potential costs and how they may impact what you can afford.
3. We’re having a baby. Should we get life insurance?
A new baby brings new responsibilities – and new expenses. Life insurance can help make sure that if an untimely death occurs, the surviving spouse can handle those responsibilities and costs without interruption.
Life insurance pays money to a chosen beneficiary — a spouse or co-parent, for example — when the insured person dies. In the short term, you can use the life insurance proceeds to pay for funeral expenses. Over time, it can help pay the mortgage and fund your child’s education.
These 8 tips for first-time life insurance buyers provide useful information to get you started.
4. Term or whole life?
So you’ve resolved to get life insurance. Now you face a new question: What kind?
- Term life: Term life insurance provides coverage for a specific number of years (such as a 30-year policy to sync up with your new 30-year mortgage). For young people starting out, term is often the easiest, most affordable option.
- Whole life: If you’re looking for lifelong coverage, then consider a whole life policy, sometimes called a permanent life plan. A smart approach is to get term insurance and make sure you’re covered now. During your policy term, you may often have the option to renew it or convert it into a permanent life plan.
A local ERIE agent can explain your options and help you decide what’s best for you.
5. What do you offer beyond the basics for homeowners insurance?
We get it: Your home is often the biggest investment you’ll make. It’s worth it to add on some extra protection to protect what you’ve worked so hard to achieve.
Ask your local agent about ERIE Secure Home Bundles, which allow you to expand your protection beyond our standard homeowner’s policy with coverage available for underground service lines, appliances and more.
6. We’re digital natives… why do we need a human insurance agent?
It makes sense to buy a lot of products online. Buying online is often easier – and sometimes more cost effective. But when it comes to insurance, a DIY online policy isn’t always the best choice. Because insurance protects the things you care about most, there are benefits to working with an insurance agent.
Savvy Questions Before You Turn 45
The ages 35 to 45 are kind of the tweener years for grownups. You’re no longer just starting out – but you don’t really feel ‘middle-aged,’ either.
Conversely, as Bruce Springsteen would say, perhaps ‘you’re scared and you’re thinking that maybe we ain’t that young anymore.’
With a growing family and responsibilities, you’re at the stage in your life that making the right insurance decisions is key. Doing so helps make sure you are prepared for whatever life throws at you, while also laying the foundation for a financially secure future.
Here are seven questions you should be asking now to help make sure you’re making smart decisions.
1. What is guaranteed replacement cost?
Losing your home to a fire or other catastrophe is a terrible experience. Yet, it can get even worse if, in the aftermath, you learn that you don’t have enough coverage to rebuild your house back to the way it was before tragedy struck – or increased costs of labor and materials make construction more expensive than what your policy is set up to cover. This is why it’s vital to consider getting guaranteed replacement cost on your homeowners insurance policy. ERIE’s guaranteed replacement cost coverage can pay for the full cost of rebuilding your house back to its previous size and specifications after a covered loss.1 (Keep in mind that guaranteed replacement cost isn’t available in all states. In North Carolina, ask about Enhanced Replacement Cost.)
2. Should I do a home inventory?
Short answer, yes. You’ve spent your hard-earned money on furnishings, electronics, jewelry, clothes, collectibles and toys large and small. In the event of a fire, theft or other loss to your home and belongings, the best way to make sure you are fully covered is to conduct a home inventory that creates a video record of your belongings and the condition of your home.
This has many benefits – the biggest, of course, is to help you estimate the value of your stuff so you can work with your insurance agent to get enough coverage. But your home inventory can also help you file claims faster and potentially apply for certain tax breaks or disaster assistance in the event of a major loss.
Read our related explainer on how to start your home inventory.
3. Have my life insurance needs changed?
Probably. If you have put off getting life insurance, now is the time to stop procrastinating and make sure your family is covered if something happens to you. Further, if you bought life insurance coverage when you were starting out, now is a good time to revisit your policy to make sure what you have meets your current and future needs.
Now may be a good time to consider extending the years on a term insurance policy or discuss the benefits of converting it to a whole life policy. A local insurance professional like an ERIE agent can help talk you through your options and help you decide what’s right for you.
4. But I have life insurance through work – shouldn’t that cover it?
Many employers provide life insurance as one of the benefits they offer employees. That’s great! But, unfortunately, many people falsely assume that gives them all the life insurance coverage they need.
For instance, your employer might provide group insurance that pays out two times your annual salary in the event you die. If you make $50,000 a year, that $100,000 payout will certainly help your family in the short term. Over time, however, it will likely fall short to cover expenses such as college tuition or healthcare needs. It’s best to talk to your ERIE agent about to make sure you have enough coverage to leave a legacy that keeps your family secure for the long haul.
Read more in our related explainer: I Have Life Insurance Through Work. Isn’t That Enough?
5. Should I be thinking about writing or updating my will?
You’re at the age you should definitely create a will if you haven’t already. Life just gets more financially complex when you own a home or have kids. And if it’s been several years since you initially wrote your will, now is a good time to update it. When you do, make sure your beneficiaries are updated if needed on your life insurance policies and investments.
Not sure where to start? Read our tips for how to choose a life insurance beneficiary.
6. Do I need a home warranty, or are my appliances covered in my homeowners policy?
Home appliances don’t last forever – and when they break down, you can face costly repairs. Sure you can purchase extra warranties, but those aren’t cheap either and they are often limited in coverage. Fortunately, ERIE customers ErieSecure Home®who also purchased Select bundle endorsement with Sewer and Drain Backup Coverage2 get an extra cushion of protection for major appliances and home systems right in a homeowners insurance policy with our Equipment Breakdown Coverage. Check with your ERIE agent to make sure you’re covered.
7. I’m on a tight budget. How can I avoid unexpected auto insurance rate hikes?
We all love a good deal. First: Check in with your local ERIE agent to make sure you’re getting all the insurance discounts you qualify for. (For example: With a multi-policy discount, you could save 16% to 25% if you insure multiple cars with us, or one car plus a home or life policy.)
IN YOUR 40’S AND 50’S
1. We’re on a collision course with college tuition and expenses. What can we do to ease the pain?
No doubt, expenses can be tight when you’re parenting teens and a “send money” request is just a push notification away. It pays to find ways to reduce costs any way you can.
Your ERIE agent can talk you through a range of potential insurance discounts, from multi-policy discounts and first accident forgiveness to a diminishing deductible option. Make sure to ask about the ERIE Rate Lock® feature1, which assures your auto rates won’t change until you add or remove a vehicle or a driver, change your address, or where you usually park your car. This policy endorsement freezes your auto premium year after year, even if you file a claim. Cha-ching.
2. How should we prepare for having more drivers in the family?
Sweet 16 can be a bit bittersweet for parents of a prospective driver. It can be nerve-wracking but there are steps to take to make sure your teen drivers are as safe as possible on the road. One great option is YourTurn®, ERIE’s driving safety app that measures certain criteria such as speeding, hard braking and phone usage, helping to make drivers of all ages more aware of their driving behaviors and identifying areas for improvement2. ERIE also offers several insurance discounts for youthful drivers, from 5 percent to 20 percent, which could apply to your family if you have new drivers.
3. Are we covered if we – or our teens – lend our car to a friend?
Whether you are willing to hand the keys to your car over to a friend or family member is a personal choice. But know that doing so does carry some risk.
Read more in our related blog on whose insurance pays when you lend your car to friends or family.
For instance, in the event of an accident, it’s your auto insurance policy that typically would have to pay. Depending on the situation – and the specifics of your policy – you might get stuck paying a surcharge on your auto insurance premium for an at-fault accident, even if you weren’t the one driving at the time. (Every policy is different, so ask your ERIE agent if this applies to you.)
4. We’re driving some nicer vehicles these days; should we get nicer insurance?
It’s worth exploring. ERIE’s standard auto policies offer great coverage, but there are some affordable ways to get extra layers of protection in the event of a crash or damage to your vehicles.
For instance, say you bought a shiny new car 18 months ago, and it ends up getting totaled. Typically, your insurance will cover the current value of the vehicle… but with depreciation, that policy might not get you back in a ride that has the same quality and features of the one now destined for the junkyard.
But by adding the ERIE Auto Security endorsement3, if you total a new car4 that’s less than two years old, ERIE will pay for the cost for you to replace it with the newest model year. In short, your car will depreciate, but your insurance doesn’t.
Also worth checking out is ERIE Auto Plus. For an additional $35 per year, this endorsement provides added benefits and protection such as diminishing deductible5 and additional transportation expense coverage6.
5. Our roof doesn’t seem to be aging as well as we are. Do we have the right coverage?
Replacing a roof is often one of the biggest investments you make as a homeowner. And it’s important to remember that your insurance policy covers sudden, unexpected damage… not routine wear and tear. Roofing insurance claims can be complicated – and each insurance company covers roof damage differently – which is why it’s so important to have the right coverage.
Learn more in our related explainer on what homeowners should know about insurance and roofs.
You also should be thinking about all the stuff that roof protects. Taking a home inventory creates a video record of your belongings and the condition of your home. This can help you choose the just-right coverage for what you own. And if you have a loss, having an inventory can expedite claims filings and applying for certain tax breaks or disaster assistance in the event of a major loss. Read more in our guide to starting your home inventory.
6. Are there life insurance moves we can make now to help us plan for a better retirement?
Short answer, most likely. As you age, your life insurance needs change. In your younger years, you may have gotten a term life policy. That’s typically the most affordable option, but does not offer the same benefits as a whole life policy that can become part of your investment/nest egg planning.
WHEN YOU APPROACH RETIREMENT
1. It’s been a while since we looked at our home and auto policies. What are the must-haves we should know about?
With your thoughts likely turning to checking off your bucket list and prepping for a comfortable retirement, you don’t need any roadblocks that steer your plan off course. That should start with making sure you have home and auto insurance aimed at effectively handling any major losses.
When it comes to your home, ERIE’s guaranteed replacement cost coverage1 can pay for the full cost of rebuilding your house back to its previous size and specifications after a covered loss – even if increased costs of labor and materials make construction more expensive than expected. Additionally, ask your agent about ERIE Secure Home Bundles, which offer ways to expand your protection beyond our standard homeowners policy for underground service lines, appliances and more.
Cruising into retirement with a new ride? Ask about the ERIE Auto Security2endorsement. If you total a new car3 that’s less than two years old, ERIE will pay to replace it with the newest model year. (In short, your car will depreciate, but your insurance doesn’t.) And if you’re looking for an affordable way to boost your auto coverage, ask about ERIE Auto Plus for extra features for just $35 (or less) per year.
2. We’ll likely be on a fixed budget in retirement. What can we do to avoid unexpected rate hikes?
Your ERIE agent can talk you through a range of potential insurance discounts, from multi-policy discounts and first accident forgiveness to a diminishing deductible option.
As you cruise into your golden years on the road, ERIE offers a few discounts and perks:
- 55+ Driving Discount: Yes, a discount for all of your good, hard-earned driving experience. Talk to your Agent about this discount.4
- Reduced Usage Discount: A good option for snowbirds: If you plan to store your vehicle for 90 consecutive days or more, ERIE offers a reduced usage discount in most states (except Kentucky).4
- Accident Prevention Course: Updating your driving skills, just like in your younger years, there’s a driving discount available for drivers 55+ who retake a driving skills course.
Beyond that, ERIE provides some additional options that help avoid untimely rate hikes. With the ERIE Rate Lock® feature6, you will pay the same auto premium year after year. Even if you have a claim, your rates won’t change until you make certain changes to your auto insurance policy, such as adding or removing a vehicle or a driver from your policy, changing your primary residence or where you usually park your car.
3. We’re thinking of downsizing. How might that affect our homeowners coverage and cost?
One might assume a smaller home translates to smaller insurance costs as well. But that’s not always the case, as a range of factors drive homeowners insurance rates. For instance, if your downsize lands you in a seaside bungalow, you could be facing a spike in what you pay for homeowners insurance because of the risks associated with coastal living.
The age of a home factors in, as well. On one hand, a newly built house needs fewer repairs and has the latest equipment, technology and safety features that can mean to lower risks — and (potentially) lower payments. On the other hand, if all that newer stuff costs more to replace, it could prove more costly to insure than your current home. Even your proximity to a fire department can impact rates.
It really comes down to a case-by-case situation. That’s why it’s a great benefit to have your ERIE agent involved during the house-hunting stage.
4. Does life insurance still make sense at this stage of our lives?
There’s no set answer for that question, which is definitely worth exploring with your ERIE agent. How much – or little – life insurance you have as an empty nester depends on a range of factors including your current and anticipated financial situation, the status of your dependents or grown children and your future plans.
Keep in mind that retirement savings might not stretch as far as expected after factoring in taxes, inflation and less-than-stellar investment returns. With a whole life policy, you can borrow against your policy cash value as well as use it to supplement your income during your retirement years. And while you’re thinking about life insurance make sure your will is updated and your beneficiaries are clearly defined.